Milbank Structured Finance partner Sean Solis was recently quoted in a Bloomberg article titled “CLOs Are a Hot Investment for Wealthy Families.” The article discusses the growing number of wealthy families who have been investing in collaterized loan obligations (CLOs) as a way to actively manage their fortunes and diversify holdings. CLOs are typically assembled by managers, who purchase loans that have been made to companies with a subinvestment-grade rating, and then package them into a structure that can be divided into interest-paying bonds and a chunk of equity.
“CLO equity has been a hot product,” says Mr. Solis. “High net-worth investors through banks as well as family offices have shown up more and more in minority positions in CLO equity.” Mr. Solis also notes that family offices tend to come in for smaller chunks, worth between $5 million and $15 million, alongside large investors like hedge funds.
